Cross-Impact Analysis of Entrepreneurial Failure and Business Model Innovation: Navigating the Impact of Societal Perceptions

Abstract

Failed entrepreneurs often encounter negative societal perceptions that impede their ability to learn from failure, take risks, and innovate business models. Reducing this stigma appears crucial to support entrepreneurship and foster innovation. However, the precise relationship between stigma reduction and desired outcomes remains uncertain. This study addresses this gap by examining the variables influencing the perception of business failure. Through a systematic literature review and content analysis, we identified 20 variables within the network. A subsequent cross-impact analysis helped delineate these variables as critical, influential, dependent, inert, or neuter. Stigma emerged as the critical variable, exerting significant influence. Culture, bankruptcy laws, social capital, the frequency of business failures, and entrepreneurial attributes played pivotal roles as influential variables. Dependent variables encompassed the rate of entrepreneurship, entrepreneurial intention, and learning from failure. This study underscores the importance of comprehending the interplay between these variables and their impact on entrepreneurial outcomes. Although the influence of societal perceptions on business model innovation proved minimal, failed entrepreneurs displayed resilience in defying stigma and engaging in innovative endeavors. Our findings shed light on the significance of societal perceptions within entrepreneurial ecosystems and the adaptability of entrepreneurs in innovating existing business models. This study lays a foundation for further research into the dynamics of these influences.